CARLSBAD, Calif., Feb. 4, 2016 /PRNewswire/ -- Callaway Golf
Company (NYSE:ELY) today announced its fourth quarter and full year
2015 financial results and provided its full year financial outlook
for 2016.
For the fourth quarter of 2015, despite significant headwinds
from unfavorable changes in foreign currency exchange rates, the
Company improved both its net sales and gross profit. Specifically,
on the strength of the Company's 2015 product line-up and its
increased market share, the Company achieved fourth quarter net
sales growth of 14% compared to fourth quarter 2014. On a
constant currency basis, the Company grew net sales by 19%.
The Company's gross margin improved by 590 basis points to
33.3%, resulting in a $14 million (or
38%) increase in gross profit for the fourth quarter of 2015
compared to the fourth quarter of 2014. On a constant currency
basis, gross margin improved by 800 basis points and gross profit
increased by $20 million (or 53%)
over the same period in the prior year. Fourth quarter 2015 loss
per share improved to $0.33, compared
to $0.54 for the fourth quarter of
2014, due to the increased sales and gross margin.
In 2015, the Company continued to gain market share and drive
improved operational efficiencies. As a result, the Company
exceeded both its full year net sales estimate of $835 - $840 million and its full year earnings
per share estimate of $0.12 - $0.15,
with full year 2015 results of $844
million in net sales and $0.17
in earnings per share.
"Overall, 2015 was a strong year for Callaway Golf," commented
Chip Brewer, President and Chief
Executive Officer of Callaway Golf Company. "We demonstrated our
ability to grow market share across multiple product categories,
while at the same time realizing operational efficiencies and
increasing profitability. One of the highlights for 2015 was
regaining a technology leadership position based on our Cup Face
technology in golf clubs and the Soft Fast Core technology in golf
balls. These groundbreaking technologies and others have
contributed to our #1 dollar market share position in the United States in total clubs, and in the
irons, fairway woods, hybrids and putters categories."
"As we enter 2016, the Company is on solid footing from multiple
perspectives: the balance sheet has been significantly strengthened
through the elimination of the convertible debt, our product
pipeline is robust and Callaway is once again a leader in the
industry," continued Mr. Brewer. "Furthermore, we continue to
be encouraged by what we see in the golf industry. Participation in
the game has stabilized, PGA Tour viewership and excitement are on
the rise, and average selling prices appear to be increasing in key
markets. Thanks to our improved market share and brand momentum we
feel we are positioned to capitalize on any future improvements in
industry conditions or foreign currency exchange rates."
Planned Joint Venture in 2016
The Company also announced today that its Tokyo-based Japanese subsidiary, Callaway Golf
K.K., plans to form a joint venture with its long-time licensee,
TSI Groove & Sports Co, Ltd., a premier apparel manufacturer in
Japan. The planned venture will be
named Callaway Apparel K.K. and will include the design,
manufacture, retail and distribution of Callaway branded apparel,
footwear and headwear in Japan.
"We are delighted to evolve our partnership with TSI Groove
& Sports Co, Ltd. in such a significant way through this joint
venture," commented Alex Boezeman,
President of Asia &
Representative Director, Callaway Golf K.K. "Since the partnership
began 14 years ago, TSI Groove & Sports has delivered
incredible quality and a distinct, fashionable style to Japanese
golfers and all those who love the game. We believe that the joint
venture will take this to a new level."
Callaway Apparel K.K.'s operations are planned to begin in the
second half of 2016. The two companies have been licensing partners
since 2002, when TSI Groove & Sports Co, Ltd. launched Callaway
Golf's apparel business in the Japanese market. The relationship
has flourished since that time with seasonal apparel lines that
have generated considerable attention in the market, especially
through Callaway staff professional and golf icon Ryo Ishikawa. Ishikawa is widely regarded as one
of the most fashionable athletes in professional golf.
"Callaway has been a tremendous partner over the years,"
commented Manabu Senza, President, TSI
Groove & Sports Co, Ltd. "Through this evolution of our
partnership – this exciting joint venture – we are thrilled to
develop a new business that will bring creativity and style under
the innovative Callaway brand."
The completion of the planned joint venture is subject to the
negotiation of definitive agreements and closing conditions and no
assurance can be provided that it will close on the terms or timing
described in this release or at all.
GAAP and Constant Currency Results
In addition to the Company's results prepared in accordance
with generally accepted accounting principles in the United States ("GAAP"), the Company also
provided additional information concerning its results on a
non-GAAP basis. This non-GAAP information presents the Company's
financial results on a constant currency basis. The manner in which
this constant currency information is derived is discussed in more
detail toward the end of this release, and the Company has provided
in the tables to this release a reconciliation of the non-GAAP
information to the most directly comparable GAAP information.
Summary of Fourth Quarter 2015 Financial Results
For the fourth quarter of 2015, the Company announced the
following GAAP and constant currency financial results, as compared
to the same period in 2014 (in millions, except eps):
GAAP
RESULTS
|
|
NON-GAAP
INFORMATION
|
|
2015 GAAP
|
2014 GAAP
|
Change
|
|
2015 Constant
Currency
|
2014 GAAP
|
Change
|
Net Sales
|
$153
|
$135
|
$18
|
|
$160
|
$135
|
$25
|
Gross
Profit/
% of Sales
|
$51
33.3%
|
$37
27.4%
|
$14
590 b.p.
|
|
$57
35.4%
|
$37
27.4%
|
$20
800 b.p.
|
Operating
Expenses
|
$80
|
$76
|
$4
|
|
$82
|
$76
|
$6
|
Pre-Tax Income
(loss)
|
($30)
|
($40)
|
$10
|
|
($27)
|
($40)
|
$13
|
EPS
|
($0.33)
|
($0.54)
|
$0.21
|
|
($0.29)
|
($0.54)
|
$0.25
|
The Company's $153 million in net
sales for the fourth quarter of 2015 increased 14% versus the
fourth quarter last year despite unfavorable changes in foreign
currency exchange rates and softer market conditions in
Asia. Unfavorable changes in
foreign currency exchange rates negatively impacted 2015 fourth
quarter net sales by $7
million. On a constant currency basis, net sales for
the fourth quarter of 2015 grew by approximately 19% compared to
the fourth quarter of 2014.
The Company's loss per share for the fourth quarter of 2015
improved to $0.33 compared to
$0.54 for the same period in
2014. The Company was able to significantly improve its gross
profit as a result of a 590 basis point improvement in gross margin
due to more favorable product pricing, less closeouts, less
promotional activity as well as improved operational efficiencies.
On a constant currency basis, the Company's loss per share would
have been $0.29. Compared to 2014,
the Company's loss per share for the fourth quarter of 2015 was
also affected by an increase of 5 million common equivalent shares
in the earnings per share calculation as a result of the Company's
convertible debt transactions.
Summary of Full Year 2015 Financial Results
For the full year 2015, the Company announced the following GAAP
and constant currency financial results, as compared to the same
period in 2014 (in millions, except eps):
GAAP
RESULTS
|
|
NON-GAAP
INFORMATION
|
|
2015 GAAP
|
2014 GAAP
|
Change
|
|
2015 Constant
Currency
|
2014 GAAP
|
Change
|
Net Sales
|
$844
|
$887
|
($43)
|
|
$897
|
$887
|
$10
|
Gross
Profit/
% of Sales
|
$358
42.4%
|
$358
40.4%
|
$0
200 b.p.
|
|
$408
45.5%
|
$358
40.4%
|
$50
510 b.p.
|
Operating
Expenses
|
$331
|
$327
|
$4
|
|
$342
|
$327
|
$15
|
Pre-Tax
Income
|
$20
|
$22
|
($2)
|
|
$58
|
$22
|
$36
|
EPS
|
$0.17
|
$0.20
|
($0.03)
|
|
$0.62
|
$0.20
|
$0.42
|
For the full year 2015, the Company's net sales decreased 5% (or
increased 1% on a constant currency basis), compared to the same
period in 2014. The constant currency sales growth was
tempered by a strategic decision on launch timing, which negatively
impacted revenues in the first quarter of 2015, and softer than
expected market conditions in Asia.
The Company's earnings per share for full year 2015 decreased
$0.03 compared to 2014 due to
unfavorable changes in foreign currency exchange rates, which
adversely affected 2015 full year earnings per share by
$0.45. On a constant currency
basis, the Company's full year earnings per share increased 210% to
$0.62 due to a 510 basis point
constant currency improvement in gross margin driven by increased
pricing, fewer closeouts, a lower promotional environment and
increased operational efficiencies.
Business Outlook for 2016
The Company is providing its full year estimates for 2016. The
planned joint venture in Japan is
expected to have only a minimal impact on net sales and gross
margin in 2016, as it is not expected to be completed until
sometime in the second half of the year. However, it will have an
impact on operating expenses as the formation and integration
activities will occur throughout 2016. The Company's best
estimate of the impact of the joint venture is included in the
guidance below.
Given the significant negative effects that foreign currencies
are expected to have on the Company's GAAP results in 2016, the
Company has provided guidance on both a GAAP and constant currency
basis. The GAAP guidance is generally based upon a blend of current
foreign currency exchange rates and the exchange rates at which the
Company entered into hedging transactions. The manner in which the
constant currency information is derived is discussed in more
detail toward the end of this release. Future changes in the
applicable foreign currency exchange rates will affect the
Company's GAAP guidance.
Full Year 2016
The Company currently estimates the following full year results
for 2016:
|
2016 GAAP
Estimate
|
2016 Constant
Currency Estimate
|
2015
Actual
|
Net Sales
|
$845 - $870
million
|
$857 - $882
million
|
$844
million
|
Constant currency growth of 1.5 - 4.5% is expected to be driven
by continued success in the market and assumes overall global
market conditions of +/– 2% in 2016. The GAAP net sales estimate
includes approximately $12 million of
anticipated negative foreign currency impact using the spot rates
as of January 19, 2016. If the
U.S. Dollar were to strengthen during the balance of the year, the
Company's GAAP sales estimates would be adversely affected.
|
2016 GAAP
Estimate
|
2016 Constant
Currency Estimate
|
2015
Actual
|
Gross
Margins
|
43.5%
|
44.0%
|
42.4%
|
The Company estimates that its 2016 gross profit as a percent of
sales will improve approximately 160 basis points from last year on
a constant currency basis. This increase is expected to be driven
by higher pricing, a lower mix of closeout products as well as
continued operational improvements.
|
2016 GAAP
Estimate
|
2016 Constant
Currency Estimate
|
2015
Actual
|
Operating
Expenses
|
$345
million
|
$349
million
|
$331
million
|
The Company estimates that its 2016 operating expenses on a
constant currency basis will increase versus 2015 due to cost of
living and inflationary increases along with investment related to
the joint venture, other new investment activities, and normally
occurring expenses that did not occur in 2015.
|
2016 GAAP
Estimate
|
2016 Constant
Currency Estimate
|
2015
Actual
|
Pre-Tax
Income
|
$20 - $30
million
|
$26 - $36
million
|
$20
million
|
The Company estimates that its 2016 pre-tax income will increase
due to improved gross margins and higher sales.
|
2016 GAAP
Estimate
|
2016 Constant
Currency Estimate
|
2015
Actual
|
Earnings Per
Share
|
$0.15 -
$0.25
|
$0.22 -
$0.32
|
$0.17
|
The Company estimates that its fully diluted earnings per share
on a constant currency basis will increase $0.05 - $0.15 from 2015. The Company's 2016
earnings per share estimates assume a base of 95 million shares as
compared to 85 million shares in 2015. The increased share count in
2016 is primarily the result of the elimination of the Company's
convertible debt. This estimate also includes taxes of
approximately $6 million.
First Quarter 2016
The Company currently estimates the following results for the
first quarter of 2016:
|
2016 GAAP
Estimate
|
2016 Constant
Currency Estimate
|
2015
Actual
|
Net Sales
|
$270 - $280
million
|
$275 - $285
million
|
$284
million
|
Constant currency net sales of flat to slightly negative is
primarily due to a change in product launch timing and lower retail
inventory levels, partially offset by continuing share gains versus
last year. The GAAP net sales estimate includes approximately
$5 million of anticipated negative
foreign currency impact using the spot rates as of January 19, 2016. If the U.S. Dollar were
to strengthen during the balance of the quarter, the Company's GAAP
sales estimates would be adversely affected.
|
2016 GAAP
Estimate
|
2016 Constant
Currency Estimate
|
2015
Actual
|
Earnings Per
Share
|
$0.33 -
$0.39
|
$0.36 -
$0.42
|
$0.39
|
The Company's 2016 first quarter earnings per share estimates
assume approximately 94 million shares as compared to a similar
share count in 2015. The estimate also includes taxes of
approximately $2 million.
Conference Call and Webcast
The Company will be holding a conference call at 2:00 p.m. PST today to discuss the Company's
financial results, outlook and business. The call will be
broadcast live over the Internet and can be accessed at
www.callawaygolf.com. To listen to the call, please go to the
website at least 15 minutes before the call to register and for
instructions on how to access the broadcast. A replay of the
conference call will be available approximately three hours after
the call ends, and will remain available through 9:00 p.m. PST on Thursday,
February 11, 2016. The replay may be accessed through
the Internet at www.callawaygolf.com.
Non-GAAP Information
The GAAP results contained in this press release and the
financial statement schedules attached to this press release have
been prepared in accordance with accounting principles generally
accepted in the United States
("GAAP"). To supplement the GAAP results, the Company has
provided certain non-GAAP financial information as follows:
Constant Currency Basis. The Company provided certain
information regarding the Company's financial results or projected
financial results on a "constant currency basis." This information
estimates the impact of changes in foreign currency rates on the
translation of the Company's current or projected future period
financial results as compared to the applicable comparable
period. This impact is derived by taking the current or
projected local currency results and translating them into U.S.
Dollars based upon the foreign currency exchange rates for the
applicable comparable period. This calculation also excludes
foreign currency net gains and losses recognized in other
income/expense from the translation of transactions denominated in
foreign currencies and foreign currency gains and losses recognized
from the Company's hedging contracts. It does not include any other
effect of changes in foreign currency rates on the Company's
results or business.
EBITDA. The Company provides information about its
results excluding interest, taxes, and depreciation and
amortization expenses.
In addition, the Company has included in the schedules to this
release a reconciliation of certain non-GAAP information to the
most directly correlated GAAP information. The non-GAAP
information presented in this release and related schedules should
not be considered in isolation or as a substitute for any measure
derived in accordance with GAAP. The non-GAAP information may also
be inconsistent with the manner in which similar measures are
derived or used by other companies. Management uses such
non-GAAP information for financial and operational decision-making
purposes and as a means to evaluate period over period comparisons
and in forecasting the Company's business going forward. Management
believes that the presentation of such non-GAAP information, when
considered in conjunction with the most directly comparable GAAP
information, provides additional useful comparative information for
investors in their assessment of the underlying performance of the
Company's business without regard to these items. The Company has
provided reconciling information in the attached schedules.
Forward-Looking Statements: Statements used in this press
release that relate to future plans, events, financial results,
performance or prospects, including statements relating to the
estimated 2016 sales, gross margins, operating expenses, pre-tax
income, taxes, and earnings per share (or related share count), the
expected terms and timing of the Company's planned joint venture in
Japan, as well as the Company's
recovery, momentum, success of future products, market share gains,
and ability to maximize current conditions or to leverage and
capitalize on improved industry or macroeconomic conditions, are
forward-looking statements as defined under the Private Securities
Litigation Reform Act of 1995. These statements are based
upon current information and expectations. Accurately
estimating the forward-looking statements is based upon various
risks and unknowns including delays, difficulties, or increased
costs in implementing the Company's turnaround strategy; the
negotiation and completion of final terms for the planned joint
venture in Japan, consumer
acceptance of and demand for the Company's products; the level of
promotional activity in the marketplace; unfavorable weather
conditions; future consumer discretionary purchasing activity,
which can be significantly adversely affected by unfavorable
economic or market conditions; future retailer purchasing activity,
which can be significantly negatively affected by adverse industry
conditions and overall retail inventory levels; and future changes
in foreign currency exchange rates and the degree of effectiveness
of the Company's hedging programs. Actual results may differ
materially from those estimated or anticipated as a result of these
risks and unknowns or other risks and uncertainties, including
continued compliance with the terms of the Company's credit
facilities; delays, difficulties or increased costs in the supply
of components or commodities needed to manufacture the Company's
products or in manufacturing the Company's products; any rule
changes or other actions taken by the USGA or other golf
association that could have an adverse impact upon demand or supply
of the Company's products; a decrease in participation levels in
golf; and the effect of terrorist activity, armed conflict, natural
disasters or pandemic diseases on the economy generally, on the
level of demand for the Company's products or on the Company's
ability to manage its supply and delivery logistics in such an
environment. For additional information concerning these and
other risks and uncertainties that could affect these statements,
the golf industry, and the Company's business, see the Company's
Annual Report on Form 10-K for the year ended December 31, 2014 as well as other risks and
uncertainties detailed from time to time in the Company's reports
on Forms 10-K, 10-Q and 8-K subsequently filed with the Securities
and Exchange Commission. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date hereof. The Company undertakes no
obligation to republish revised forward-looking statements to
reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
About Callaway Golf
Through an unwavering
commitment to innovation, Callaway Golf Company (NYSE:ELY) creates
products designed to make every golfer a better golfer. Callaway
Golf Company manufactures and sells golf clubs and golf balls, and
sells golf accessories, under the Callaway Golf® and Odyssey®
brands worldwide. For more information please visit
www.callawaygolf.com.
Contacts:
|
Robert
Julian
|
|
Patrick
Burke
|
|
(760)
931-1771
|
CALLAWAY GOLF
COMPANY
CONSOLIDATED
CONDENSED BALANCE SHEETS
(Unaudited)
(In
thousands)
|
|
|
December 31,
2015
|
|
December 31,
2014
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
49,801
|
|
|
|
$
|
37,635
|
|
Accounts receivable,
net
|
|
115,607
|
|
|
|
109,848
|
|
Inventories
|
|
208,883
|
|
|
|
207,229
|
|
Other current
assets
|
|
17,196
|
|
|
|
29,321
|
|
Total current
assets
|
|
391,487
|
|
|
|
384,033
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
55,808
|
|
|
|
58,093
|
|
Intangible assets,
net
|
|
115,282
|
|
|
|
116,654
|
|
Investment in
golf-related ventures
|
|
53,315
|
|
|
|
50,677
|
|
Other
assets
|
|
15,332
|
|
|
|
15,354
|
|
Total
assets
|
|
$
|
631,224
|
|
|
|
$
|
624,811
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
|
122,620
|
|
|
|
$
|
123,251
|
|
Accrued employee
compensation and benefits
|
|
33,518
|
|
|
|
37,386
|
|
Asset-based credit
facilities
|
|
14,969
|
|
|
|
15,235
|
|
Accrued warranty
expense
|
|
5,706
|
|
|
|
5,607
|
|
Income tax
liability
|
|
1,823
|
|
|
|
2,623
|
|
Deferred taxes,
net
|
|
—
|
|
|
|
26
|
|
Total current
liabilities
|
|
178,636
|
|
|
|
184,128
|
|
|
|
|
|
|
|
Long-term
liabilities
|
|
39,643
|
|
|
|
149,149
|
|
Total shareholders'
equity
|
|
412,945
|
|
|
|
291,534
|
|
Total liabilities and
shareholders' equity
|
|
$
|
631,224
|
|
|
|
$
|
624,811
|
|
CALLAWAY GOLF
COMPANY
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands,
except per share data)
|
|
|
Quarter Ended
December 31,
|
|
2015
|
|
2014
|
Net sales
|
$
|
153,331
|
|
|
$
|
134,606
|
|
Cost of
sales
|
102,263
|
|
|
97,690
|
|
Gross
profit
|
51,068
|
|
|
36,916
|
|
Operating
expenses:
|
|
|
|
Selling
|
50,235
|
|
|
49,445
|
|
General and
administrative
|
21,160
|
|
|
18,203
|
|
Research and
development
|
9,021
|
|
|
8,382
|
|
Total operating
expenses
|
80,416
|
|
|
76,030
|
|
Loss from
operations
|
(29,348)
|
|
|
(39,114)
|
|
Other expense,
net
|
(611)
|
|
|
(445)
|
|
Loss before income
taxes
|
(29,959)
|
|
|
(39,559)
|
|
Income tax
provision
|
493
|
|
|
1,980
|
|
Net loss
|
$
|
(30,452)
|
|
|
$
|
(41,539)
|
|
|
|
|
|
Loss per common
share:
|
|
|
|
Basic
|
$
|
(0.33)
|
|
|
$
|
(0.54)
|
|
Diluted
|
$
|
(0.33)
|
|
|
$
|
(0.54)
|
|
Weighted-average
common shares outstanding:
|
|
|
|
Basic
|
92,272
|
|
|
77,582
|
|
Diluted
|
92,272
|
|
|
77,582
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
2015
|
|
2014
|
Net sales
|
$
|
843,794
|
|
|
$
|
886,945
|
|
Cost of
sales
|
486,161
|
|
|
529,019
|
|
Gross
profit
|
357,633
|
|
|
357,926
|
|
Operating
expenses:
|
|
|
|
Selling
|
228,910
|
|
|
234,231
|
|
General and
administrative
|
68,567
|
|
|
61,662
|
|
Research and
development
|
33,213
|
|
|
31,285
|
|
Total operating
expenses
|
330,690
|
|
|
327,178
|
|
Income from
operations
|
26,943
|
|
|
30,748
|
|
Other expense,
net
|
(6,880)
|
|
|
(9,109)
|
|
Income before income
taxes
|
20,063
|
|
|
21,639
|
|
Income tax
provision
|
5,495
|
|
|
5,631
|
|
Net income
|
$
|
14,568
|
|
|
$
|
16,008
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
Basic
|
$
|
0.18
|
|
|
$
|
0.21
|
|
Diluted
|
$
|
0.17
|
|
|
$
|
0.20
|
|
Weighted-average
common shares outstanding:
|
|
|
|
Basic
|
83,116
|
|
|
77,559
|
|
Diluted
|
84,611
|
|
|
78,385
|
|
CALLAWAY GOLF
COMPANY
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
(In
thousands)
|
|
|
Year Ended
December 31,
|
|
2015
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
14,568
|
|
|
$
|
16,008
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
17,379
|
|
|
21,236
|
|
Deferred taxes,
net
|
128
|
|
|
604
|
|
Share-based
compensation
|
7,542
|
|
|
5,740
|
|
Gain on disposal of
long-lived assets and deferred gain amortization
|
(1,006)
|
|
|
(1,331)
|
|
Debt discount
amortization on convertible notes
|
531
|
|
|
739
|
|
Changes in assets and
liabilities
|
(8,561)
|
|
|
(6,116)
|
|
Net cash provided by
operating activities
|
30,581
|
|
|
36,880
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(14,369)
|
|
|
(10,753)
|
|
Note
receivable
|
(3,104)
|
|
|
—
|
|
Proceeds from sale of
property, plant and equipment
|
2
|
|
|
458
|
|
Investment in
golf-related ventures
|
(940)
|
|
|
(14,771)
|
|
Net cash used in
investing activities
|
(18,411)
|
|
|
(25,066)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Repayment of
asset-based credit facilities, net
|
(266)
|
|
|
(10,425)
|
|
Exercise of stock
options
|
6,565
|
|
|
2,291
|
|
Dividends
paid
|
(3,391)
|
|
|
(3,105)
|
|
Acquisition of
treasury stock
|
(1,960)
|
|
|
(1,006)
|
|
Credit facility
amendment costs
|
—
|
|
|
(608)
|
|
Other financing
activities
|
—
|
|
|
(33)
|
|
Net cash provided by
(used in) financing activities
|
948
|
|
|
(12,886)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(952)
|
|
|
1,914
|
|
Net increase in cash
and cash equivalents
|
12,166
|
|
|
842
|
|
Cash and cash
equivalents at beginning of period
|
37,635
|
|
|
36,793
|
|
Cash and cash
equivalents at end of period
|
$
|
49,801
|
|
|
$
|
37,635
|
|
CALLAWAY GOLF
COMPANY
Consolidated Net
Sales and Operating Segment Information and Non-GAAP
Reconciliation
(Unaudited)
(In
thousands)
|
|
|
Net Sales by
Product Category
|
|
Net Sales by
Product Category
|
|
Quarter Ended
December 31,
|
|
Growth/(Decline)
|
|
Non-GAAP Constant
Currency
vs.
2014(1)
|
|
Year Ended
December 31,
|
|
Growth/(Decline)
|
|
Non-GAAP Constant
Currency
vs.
2014(1)
|
|
2015
|
|
2014
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
2015
|
|
2014
|
|
Dollars
|
|
Percent
|
|
Percent
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woods
|
$
|
34,915
|
|
|
$
|
36,594
|
|
|
$
|
(1,679)
|
|
|
(5)%
|
|
|
1%
|
|
$
|
222,193
|
|
|
$
|
269,468
|
|
|
$
|
(47,275)
|
|
|
(18)%
|
|
|
(12)%
|
Irons
|
42,250
|
|
|
38,327
|
|
|
3,923
|
|
|
10%
|
|
|
15%
|
|
205,522
|
|
|
200,174
|
|
|
5,348
|
|
|
3%
|
|
|
9%
|
Putters
|
13,707
|
|
|
9,021
|
|
|
4,686
|
|
|
52%
|
|
|
59%
|
|
86,293
|
|
|
81,161
|
|
|
5,132
|
|
|
6%
|
|
|
14%
|
Gear/Accessories/Other
|
32,483
|
|
|
30,193
|
|
|
2,290
|
|
|
8%
|
|
|
12%
|
|
186,641
|
|
|
199,153
|
|
|
(12,512)
|
|
|
(6)%
|
|
|
—%
|
Golf balls
|
29,976
|
|
|
20,471
|
|
|
9,505
|
|
|
46%
|
|
|
51%
|
|
143,145
|
|
|
136,989
|
|
|
6,156
|
|
|
4%
|
|
|
10%
|
|
$
|
153,331
|
|
|
$
|
134,606
|
|
|
$
|
18,725
|
|
|
14%
|
|
|
19%
|
|
$
|
843,794
|
|
|
$
|
886,945
|
|
|
$
|
(43,151)
|
|
|
(5)%
|
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated by
applying 2014 exchange rates to 2015 reported sales in regions
outside the U.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales by
Region
|
|
Net Sales by
Region
|
|
Quarter Ended
December 31,
|
|
Growth/(Decline)
|
|
Non-GAAP Constant
Currency
vs.
2014(1)
|
|
Year Ended
December 31,
|
|
Growth/(Decline)
|
|
Non-GAAP Constant
Currency
vs.
2014(1)
|
|
2015
|
|
2014
|
|
Dollars
|
|
Percent
|
|
Percent
|
|
2015
|
|
2014
|
|
Dollars
|
|
Percent
|
|
Percent
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
68,897
|
|
|
$
|
50,026
|
|
|
$
|
18,871
|
|
|
38%
|
|
|
38%
|
|
$
|
446,474
|
|
|
$
|
421,773
|
|
|
$
|
24,701
|
|
|
6%
|
|
|
6%
|
Europe
|
21,479
|
|
|
19,352
|
|
|
2,127
|
|
|
11%
|
|
|
20%
|
|
125,116
|
|
|
134,401
|
|
|
(9,285)
|
|
|
(7)%
|
|
|
7%
|
Japan
|
34,781
|
|
|
38,555
|
|
|
(3,774)
|
|
|
(10)%
|
|
|
(5)%
|
|
138,031
|
|
|
166,162
|
|
|
(28,131)
|
|
|
(17)%
|
|
|
(5)%
|
Rest of
Asia
|
17,975
|
|
|
15,749
|
|
|
2,226
|
|
|
14%
|
|
|
20%
|
|
70,315
|
|
|
89,603
|
|
|
(19,288)
|
|
|
(22)%
|
|
|
(17)%
|
Other foreign
countries
|
10,199
|
|
|
10,924
|
|
|
(725)
|
|
|
(7)%
|
|
|
9%
|
|
63,858
|
|
|
75,006
|
|
|
(11,148)
|
|
|
(15)%
|
|
|
(2)%
|
|
$
|
153,331
|
|
|
$
|
134,606
|
|
|
$
|
18,725
|
|
|
14%
|
|
|
19%
|
|
$
|
843,794
|
|
|
$
|
886,945
|
|
|
$
|
(43,151)
|
|
|
(5)%
|
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated by
applying 2014 exchange rates to 2015 reported sales in regions
outside the U.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment
Information
|
|
|
|
Operating Segment
Information
|
|
|
|
Quarter Ended
December 31,
|
|
Growth
|
|
|
|
Year Ended
December 31,
|
|
Growth/(Decline)
|
|
|
|
2015
|
|
2014
|
|
Dollars
|
|
Percent
|
|
|
|
2015
|
|
2014
|
|
Dollars
|
|
Percent
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golf Club
|
$
|
123,355
|
|
|
$
|
114,135
|
|
|
$
|
9,220
|
|
|
8%
|
|
|
|
|
$
|
700,649
|
|
|
$
|
749,956
|
|
|
$
|
(49,307)
|
|
|
(7)%
|
|
|
|
Golf Ball
|
29,976
|
|
|
20,471
|
|
|
9,505
|
|
|
46%
|
|
|
|
|
143,145
|
|
|
136,989
|
|
|
6,156
|
|
|
4%
|
|
|
|
|
$
|
153,331
|
|
|
$
|
134,606
|
|
|
$
|
18,725
|
|
|
14%
|
|
|
|
|
$
|
843,794
|
|
|
$
|
886,945
|
|
|
$
|
(43,151)
|
|
|
(5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golf clubs
|
$
|
(16,556)
|
|
|
$
|
(27,032)
|
|
|
$
|
10,476
|
|
|
(39)%
|
|
|
|
|
$
|
52,999
|
|
|
$
|
50,891
|
|
|
$
|
2,108
|
|
|
4%
|
|
|
|
Golf balls
|
165
|
|
|
(2,127)
|
|
|
2,292
|
|
|
(108)%
|
|
|
|
|
17,724
|
|
|
15,222
|
|
|
2,502
|
|
|
16%
|
|
|
|
Reconciling
items(1)
|
(13,568)
|
|
|
(10,400)
|
|
|
(3,168)
|
|
|
30%
|
|
|
|
|
(50,660)
|
|
|
(44,474)
|
|
|
(6,186)
|
|
|
14%
|
|
|
|
|
$
|
(29,959)
|
|
|
$
|
(39,559)
|
|
|
$
|
9,600
|
|
|
(24)%
|
|
|
|
|
$
|
20,063
|
|
|
$
|
21,639
|
|
|
$
|
(1,576)
|
|
|
(7)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents
corporate general and administrative expenses and other income
(expense) not utilized by management in determining segment
profitability.
|
CALLAWAY GOLF
COMPANY
Supplemental
Financial Information - Non-GAAP Information and
Reconciliation
(Unaudited)
(In thousands,
except per share data)
|
|
|
Quarter Ended
December 31,
|
|
|
|
Year Ended
December 31,
|
|
|
|
2015
|
|
2015
|
|
2015(1)
|
|
2014
|
|
|
|
2015
|
|
2015
|
|
2015(1)
|
|
2014
|
|
|
|
Callaway
Golf
|
|
Foreign
Currency
|
|
Non-GAAP
|
|
Callaway
Golf
|
|
|
|
Callaway
Golf
|
|
Foreign
Currency
|
|
Non-GAAP
|
|
Callaway
Golf
|
|
|
|
As
Reported
|
|
Impact
|
|
Constant
Currency
|
|
As
Reported
|
|
|
|
As
Reported
|
|
Impact
|
|
Constant
Currency
|
|
As
Reported
|
|
|
Net sales
|
$
|
153,331
|
|
|
$
|
6,532
|
|
|
$
|
159,863
|
|
|
$
|
134,606
|
|
|
|
|
$
|
843,794
|
|
|
$
|
53,170
|
|
|
$
|
896,964
|
|
|
$
|
886,945
|
|
|
|
Gross
profit
|
51,068
|
|
|
5,596
|
|
|
56,664
|
|
|
36,916
|
|
|
|
|
357,633
|
|
|
50,099
|
|
|
407,732
|
|
|
357,926
|
|
|
|
% of sales
|
33.3
|
%
|
|
n/a
|
|
35.4
|
%
|
|
27.4
|
%
|
|
|
|
42.4
|
%
|
|
n/a
|
|
45.5
|
%
|
|
40.4
|
%
|
|
|
Operating
expenses
|
80,416
|
|
|
1,848
|
|
|
82,264
|
|
|
76,030
|
|
|
|
|
330,690
|
|
|
11,001
|
|
|
341,691
|
|
|
327,178
|
|
|
|
Income (loss) from
operations
|
(29,348)
|
|
|
3,748
|
|
|
(25,600)
|
|
|
(39,114)
|
|
|
|
|
26,943
|
|
|
39,098
|
|
|
66,041
|
|
|
30,748
|
|
|
|
Other income
(expense), net
|
(611)
|
|
|
(338)
|
|
|
(949)
|
|
|
(445)
|
|
|
|
|
(6,880)
|
|
|
(1,266)
|
|
|
(8,146)
|
|
|
(9,109)
|
|
|
|
Income (loss) before
income taxes
|
(29,959)
|
|
|
3,410
|
|
|
(26,549)
|
|
|
(39,559)
|
|
|
|
|
20,063
|
|
|
37,832
|
|
|
57,895
|
|
|
21,639
|
|
|
|
Income tax
provision
|
493
|
|
|
112
|
|
|
605
|
|
|
1,980
|
|
|
|
|
5,495
|
|
|
285
|
|
|
5,780
|
|
|
5,631
|
|
|
|
Net income
(loss)
|
$
|
(30,452)
|
|
|
$
|
3,298
|
|
|
$
|
(27,154)
|
|
|
$
|
(41,539)
|
|
|
|
|
$
|
14,568
|
|
|
$
|
37,547
|
|
|
$
|
52,115
|
|
|
$
|
16,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share:
|
$
|
(0.33)
|
|
|
$
|
0.04
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.54)
|
|
|
|
|
$
|
0.17
|
|
|
$
|
0.45
|
|
|
$
|
0.62
|
|
|
$
|
0.20
|
|
|
|
Weighted-average
shares outstanding:
|
92,272
|
|
|
92,272
|
|
|
92,272
|
|
|
77,582
|
|
|
|
|
84,611
|
|
|
84,611
|
|
|
84,611
|
|
|
78,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Calculated by
applying 2014 exchange rates to 2015 reported results in regions
outside the U.S.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
2015 Trailing
Twelve Month EBITDA
|
|
2014 Trailing
Twelve Month EBITDA
|
|
Quarter
Ended
|
|
Quarter
Ended
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
|
Total
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
Total
|
Net income
(loss)
|
$
|
35,819
|
|
|
$
|
12,818
|
|
|
$
|
(3,617)
|
|
|
$
|
(30,452)
|
|
|
$
|
14,568
|
|
|
$
|
55,312
|
|
|
$
|
3,369
|
|
|
$
|
(1,134)
|
|
|
$
|
(41,539)
|
|
|
$
|
16,008
|
|
Interest expense,
net
|
2,021
|
|
|
1,936
|
|
|
3,520
|
|
|
868
|
|
|
8,345
|
|
|
2,648
|
|
|
2,612
|
|
|
2,037
|
|
|
1,764
|
|
|
9,061
|
|
Income tax
provision
|
1,638
|
|
|
1,817
|
|
|
1,547
|
|
|
493
|
|
|
5,495
|
|
|
1,474
|
|
|
1,873
|
|
|
304
|
|
|
1,980
|
|
|
5,631
|
|
Depreciation and
amortization expense
|
4,703
|
|
|
4,454
|
|
|
4,193
|
|
|
4,029
|
|
|
17,379
|
|
|
5,697
|
|
|
5,460
|
|
|
5,222
|
|
|
4,857
|
|
|
21,236
|
|
EBITDA
|
$
|
44,181
|
|
|
$
|
21,025
|
|
|
$
|
5,643
|
|
|
$
|
(25,062)
|
|
|
$
|
45,787
|
|
|
$
|
65,131
|
|
|
$
|
13,314
|
|
|
$
|
6,429
|
|
|
$
|
(32,938)
|
|
|
$
|
51,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Foreign
Exchange Impacts
|
|
* 2016 Operating
Margins Impact
|
- EUR 1% Move:
$0.5m
|
- GBP 1% Move:
$0.7m
|
- JPY 1% Move:
$1.1m
|
- KRW 1% Move:
$0.4m
|
- All Other**
1% Move: $0.4m
|
|
* Overall Hedged
at approximately 75% of our Net Exposure
|
Hedged
Rates
|
-
EUR 1.08
|
-
GBP 1.47
|
-
JPY 118.65
|
-
KRW 1182.38
|
-
CAD 1.38
|
-
AUD 0.71
|
|
* Operating Margin
Impact can vary depending on the region and the time of
year.
|
** Includes the CAD,
AUD, CNY and INR
|
|
Logo - http://photos.prnewswire.com/prnh/20091203/CGLOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/callaway-golf-company-announces-fourth-quarter-and-full-year-2015-financial-results-with-revenue-and-profitability-exceeding-the-companys-expectations-and-announces-plans-for-a-new-joint-venture-in-japan-in-late-2016-300215589.html
SOURCE Callaway Golf Company